By Geoff Smith

While we in North Fulton have been dickering for years about MARTA expansion, I noticed a change: the conversation seems to have shifted from “yes” or “no”, to “what kind.”

Fulton County Commissioners and the county’s mayors got together yesterday to see the results of a 6-month transit analysis and public engagement study. According to an article in today’s Atlanta Business Chronicle, the consultants hired by the county presented five different options ranging from an “aspirational” plan that includes the rail lin expanded up GA400, to one limited to bus-rapid transit.

North Fulton residents and leaders are mixed in opinion with some wanting the rail line expanded to Windward Parkway, while others don’t want it expanded past Holcomb Bridge Road. Conversation hit a fever pitch last year as leaders first pitched an increased sales tax that would go directly toward MARTA expansion. What was finally approved by voters was a 3/4 of a penny increase in our sales tax with the funds being divvied up among the cities to be used only on transportation, not transit, improvements. This was a huge shot in the arm for our North Fulton cities and a number of projects are underway now because of the influx of revenue.

But the argument for expansion of MARTA remains strong in North Fulton. Fulton Commissioner Liz Hausmann summed up the reasons for expansion pretty well in the article in the Chronicle.

“It’s imperative our region consider transit as a necessary component for congestion relief,” she said. “A well-managed transportation system will foster economic prosperity and continue to keep our state as a national leader in which to do business.”

It’s almost impossible to determine how many more people would actually ride the train if it was expanded to Holcomb Bridge Road, especially considering that if we started construction on it tomorrow it wouldn’t be finished for another 5 years or more.

But there is a lot of talk about our lack of affordable, or critical workforce, housing in North Fulton. Land has become so expensive here that without significantly increasing the density, which is measured in things like units per acre, or number of stories a building can go up, developers cannot build homes or condos under $400,000 and make a profit. So our firefighters, policemen and women, and restaurant and retail workers all have to fight through traffic to get here. If you have a friend who owns a restaurant, ask him or her how often they have to rehire. My friends tell me its often. If we cannot figure out how to get more ‘affordable’ housing here in North Fulton, an efficient transit system could help alleviate that problem.

If ridership doesn’t move you on this issue, perhaps this will. Even if you have only casually been following all of the corporate relocations to Atlanta over the last several years, you understand this: today’s corporations want to be near mass transit. Mercedes-Benz put their North American headquarters off Abernathy in Sandy Springs. In their press release, they said being near MARTA was critical. State Farm is building a massive campus across the street from the Dunwoody station. They included a walking bridge over Hammond Drive connecting the campus to the station. You can bet that if Amazon puts HQ2 in Atlanta, it will be next to a MARTA station. If we want to attract new relocations to North Fulton, it’s going to be harder to do without a good mass transit system in place.

But here is something else to think about: NCR just moved their headquarters from Duluth to downtown Atlanta. They wanted to be in a walkable environment with plenty of mass transit options. So not having a mass transit system in place is not only hurting our ability to recruit new business, it’s giving existing businesses a reason to move out. I will now think about that every time I drive through downtown and see NCR’s new 22-story building reaching up and over the highway.

Setting aside the fact that these corporations help our local economy by supporting our retail, restaurant and network of other small businesses throughout the day, having less of them will only exacerbate our traffic issues. Once finished, you know how NCR’s employees that live in North Fulton will get to work? GA400 south.

By Geoff Smith

If you are looking for a new home under the $400,000 price-range, I know how competitive it is. But after some serious research, I have found a solution for you: go buy a $900,000-house.

If only it were that easy!

I just finished reading through Smart Real Estate Data’s third quarter newsletter and I’m stunned again by the lack of inventory available to most homebuyers. Our homebuilders can’t seem to catch up to the demand that is out there.

Inventory is measured in ‘months of supply’. The numbers reflect the months it would take for homebuyers to buy up all the currently listed homes if no new houses came onto the market. Experts consider a healthy housing economy to have 6.5 months of supply. Why is it unhealthy for there to be more or less? Supply and demand.

If you have less months of supply, then the demand is stronger than the supply and home prices rise quickly as buyers compete for the relatively low number of houses on the market. If you have more than 6.5 months of supply, then it’s a buyer’s market and values can drop as sellers compete for the relatively few buyers.

In the below $300,000-market, there are less 2.5 months of supply. That is one of the lowest months of inventory in the history of people keeping track of these numbers. In the $300,000 to $400,000-range, it only rises to just above 2.5 months. The $500,000 to $600,000-range is where the market finally starts getting healthy with about 6 months of inventory. Above that and it quickly gets unhealthy again with inventories above 7.5 months.

By the way, that $900,000 to $1M-range I mentioned at the beginning of this article has well over 10 months of inventory. It is a good time to get a deal in that range.

Based on the laws of supply and demand, prices on sub $400,000-homes are rising and on the $600,000-homes are lowering. Maybe someday everything will be priced around $500,000!

Obviously that won’t happen. But the laws of supply and demand are making the lower priced homes even more expensive, eventually creating even less inventory for a market already starved for inventory. Capitalism usually has a way of evening these kinds of things out. But building houses in the sub $300,000-range is a hard thing to do these days.

Land has gotten more expensive in the metro area. Builders are having to pay more to comply with an increased number of regulations that most residents want, and pay more for increased impact fees which help fund capital improvements to fire, police and other municipal departments. There is a labor shortage in the construction industry, so builders are having to pay more to lure subcontractors away from other builders. And with unemployment so low in general, we are not seeing employees from other industries jumping over to meet the demand.

The average price of a new home was $334,977 for the third quarter. With the increased costs, the builders are having to build more expensive homes to keep their margins. But if you look at the more expensive homes – there is a relative glut. The demand is for the lower-priced homes.

In the coming years, it’s very possible that we could see more effort from both the private industry and the public, to find creative ways to build more, lower-priced homes.

Some cities and counties are seeing this as an ‘affordable housing’ crisis where many of the people who work in their police, fire and retail service sectors are not able to live close to where they work. I’ve heard some folks try to blame the developers. But developers are pretty simple creatures. If the project will make their business money, they’ll probably build it. If it will lose their company money, they probably won’t. They know the demand is there, it is just hard to make the numbers work.

By Geoff Smith

The Alpharetta Hotel and Conference Center should be complete in Avalon early next year

I was born in North Fulton, raised in North Fulton and I live with my family today in North Fulton. I have a good many friends up here who have said I should get out more, but you know what? All those friends moved here – to my home.

Roswell’s locally renown Canton Street during an Alive After Five event

If you know me, you’ve heard me say this: I’d rather be from the place everyone is moving to, than the place they are all moving from. And for the last 43 years, people and businesses have fought to get into North Fulton.Some say that North Fulton’s success is because of the fiber-optic cable that was laid along roads in Alpharetta in the early 1990s. Others say it was Jim Cowart’s vision to build the first gated community of Country Club of the South. I’ll add that it was Roswell’s vision back in the 1970s to develop what just recently was awarded the Gold Medal Award for the best Recreation and Parks Department in the entire country.

You could keep going further back to Roswell’s founder, Roswell King in the mid-1800s. He stopped in Roswell to build a cotton mill. He was from Connecticut and back then, the south shipped most of the cotton it grew to the north for processing. The finished products were shipped back down here to sell. King started the mill to cut out the shipping costs and boom – a successful business town was born.

It is beautiful country up here. Roswell has about 10 miles of the Chattahoochee River running through it, and Johns Creek has about 13. Big Creek flows from Forsyth County with a near-continuous bike path along it through Alpharetta to Roswell. Take a drive through Milton’s horse country and you’ll get jealous in a hurry that you don’t live there. Go to Canton Street in Roswell, or see what’s going up in downtown Alpharetta near Avalon and you’ll feel the same way.

One of Milton’s many horse farms

It’s no wonder people want to pay top dollar to live here, and businesses want their employees to work here. Alpharetta has more than 600 technology companies within its borders. Windward Parkway should be a brand in itself. Johns Creek is awash in successful corporate offices – its downtown is essentially a grouping of corporate campuses.When they look for a move, today’s corporations are trying to think like millennials – who will make up half of the workforce by 2020. Most think that means moving intown near mass transit and in areas that are highly walkable and full of action. North Fulton is countering this with the most desired suburban downtowns in the metro area and an incredible collection of undeveloped parks that take full advantage of the river and creeks. Roswell owns more than a mile of parkland along the Chattahoochee that is already master-planned. And once developed, will be a park not just enjoyed here in North Fulton, but admired throughout the metro area. It will surely be yet another draw for businesses looking to make a move.

John’s Creek recently approved plans for a linear park near some of its office parks

I have not even mentioned the schools, but by almost any measure, you will not find a collection of higher-performing public high schools anywhere in Georgia. U.S. News’ rankings have 6 of the top 8 public high schools in Georgia as being located in North Fulton.North Fulton didn’t get this way because of a few major events. It got this way because great servants in our community took these great resources and worked them inch-by-inch, project-by-project and success-by-success to piece together what I think is the best place to live, work and play on the planet(a new friend of mine said its better than her home city of Paris, France. So…). The key now will be to take what we have been given to the next level so that my two boys will say the same thing in 30 years. And with the resources we already have, the sky should be the limit.

Market Watch

Rates Sitting Still… Still

Mortgage interest rates have not really budged from this time last week. There is talk about a new tax plan, talk about the Executive Branch rolling back some policies involved in the Affordable Care Act, and talk about the Fed standing firm on several interest rate raises throughout next year. But at this time, investors seem to be saying…”that’s just talk.” They all seem to be from the “Show Me” state this week. Mortgage Interest rates are holding firm to recent highs.

What this Means to You:

According to Mortgage News Daily’s Rate Survey, best execution rates for a conventional 30-year fixed are at 3.96%.

By Geoff Smith

There isn’t much doubt about it, most people will finally agree that there are really great restaurants throughout the metro Atlanta area.

Growing up in Roswell, it seemed that transplanted New Yorker’s loved to complain about the food. The Italian food was boring, there were no good bagels, and forget about finding a good Chinese restaurant. Well nowadays, I don’t hear that kind of talk. Folks are pretty fat and happy in Atlanta.

Chefs have grown more and more creative. And creative in a way that draws people consistently into their restaurants. Different parts of the metro area are developing their own styles too. Canton Street in Roswell has more great restaurants per square foot than maybe anywhere else in the metro area, all serving out of buildings first built in the late 1800s. Alpharetta’s restaurants are a bit more spread out and refined, but fantastic. Ponce City Market in Atlanta has its food court packed with several unique and great restaurants where most of the seating is stretched along barstools.

Perhaps the most unique area walks a thin line between being considered under the radar here in Atlanta, and well-known among chef circles outside of Atlanta. It is Buford Highway. Written up in Bon Appetit, this 7-mile stretch of road heading north from I-285 was called a “United Nations of restaurants.” In this stretch of road you can get Vietnamese, Korean, Chinese, Indian, Somali, Mexican, combinations of those, and many other types of food. Some of you might think that you’ve got Vietnamese, Chinese and Mexican restaurants close to your home. But the difference here is that these restaurants cook their food as if they are serving not Americans, but people from their home countries.

It has developed a serious ‘it’ factor. So much so that when Anthony Bourdain, a king of cool, brought his show to Atlanta, he spent a lot of time eating in, and complimenting restaurants there.

To the eye, this stretch of road is probably not the most inviting stretch of road. These great restaurants are scattered throughout strip malls that were built during a time when we had little ability for urban planning. But that could be about to change.

One of Atlanta’s king of cool, Ryan Gravel, is setting his sites on Buford Highway.

If you do not know, Gravel conceptualized the idea of The Beltline while a student at GA Tech, and then worked as a planner to make it a reality. The Beltline has become one of the most successful redevelopment ideas of our time anywhere in the country and has transformed every community it runs through. He left The Beltline project because he thought they were getting away from his idea to incorporate more affordable, lower-income workforce housing.

According to Reporter Newspapers, Gravel created a nonprofit called Generator. Its mission is to be an “idea studio…committed to the production of ideas about cities that nobody is asking for.” His first Generator workshop will be a School of Design class at Georgia Tech that will focus on Buford Highway.

According to the article, he finds this area interesting because it deals with a lot of issues that are prevalent throughout the country. There is a large immigrant population there, and he sees this as a way to create a solution for suburban immigrant populations throughout the country. They are going to look at different transit options and different ways to move people around. His design principals will go much deeper than transit and affordable housing options too. He wants to create ways to force people to interact and “love” each other more.

Inventory Still Historically Low

Courtesy of Smart Real Estate Data

By Geoff Smith

For the first time, new home construction closing numbers are competing with pre-recession levels. And it’s nowhere near enough.

According to numbers just released from Smart Real Estate Data, there was an estimated 5,566 new construction closings in the 2nd quarter of this year, and 10,182 closings in the first half of this year. These numbers are similar to numbers posted in the first half of 2008, which was right before the collapse.

And this trend doesn’t appear to be slowing down. In the 2nd quarter, 7,110 new home permits were issued – the most permits issued for a quarter since 3rd quarter of 2007. So clearly with all of this new construction going on, we must be flush with new homes on the market. Right? Wrong.

In most markets, it is hard to find and buy a house. Housing inventory is measured by the numbers of months it would take to sell out all existing listings with no new listings coming to market. Most experts agree that a healthy market is with 6 months of supply. At that mark, home values are increasing at a safe pace. With too much inventory, sellers are competing for limited buyers and home values can actually start to drop. With too little inventory, buyers are competing for limited houses and home values rise too fast. Right now, inventory is historically low at an average 3.29 months. It’s the lowest level since they’ve been recording this type of data. And that number is trending downward. Inventory averaged 3.63 months the same time last year.

And in keeping with the laws of supply and demand, the invisible hand has pushed home prices up an average of 5.6% over the last year. In some markets its less than that, and in others it’s much more.

You might think that since new construction pace is back to pre-recession levels, and inventory is still low, then resales are probably down. You might think that, but you’d be wrong. In the 2nd quarter of this year, the metro area set an all-time record for the most resale closings in a quarter with 25,992 closings. So why is inventory so low then?

Here is why: we are adding more new homebuyers to the market than homes being built. Over the last three years, according to the U.S. Census Bureau, the metro area’s population has grown by an average of just over 20,000 people per quarter, or about 7,000 people a month. Not all of those people need a home as families are included in those numbers, but add to those numbers the amount of first time homebuyers trying to move out of their parents’ basements and you have more new homebuyers than new homes coming to market. And this trend doesn’t look like it will be changing anytime soon. So that is leaving the door open for other types of housing to grow.

“All around Atlanta’s core are apartment buildings going up left-and-right,” said Mitchel Palm, Senior Associate with Smart Real Estate Data. “That is where a lot of these people moving to Atlanta are residing.”

Homebuilders are trying to do their part, but Palm says a lack of affordable, developable land, inflation on building materials, and a lack of skilled labor are sucking the wind out of their sails.

An interesting point that stuck out to me is that we are nearing peak levels of new residential construction, but our inventory is shrinking. The metro area has become massive. We are operating in much deeper waters than we were just 9 years ago. The city’s success is attracting people from all over the world.